Grocer Agrees With Its Creditors

Fall Exit From Bankruptcy Planned

June 16, 2006|By Jaclyn Giovis Business Writer

Winn-Dixie Stores Inc., the struggling Jacksonville-based supermarket chain, plans to file its reorganization plan by the end of the month and could emerge from bankruptcy by late October, a company spokesman said Thursday.

During a court hearing Thursday, Winn-Dixie's attorney told the presiding U.S. District bankruptcy judge that a committee of creditors reached an agreement on how they will be paid and the company has agreed, Winn-Dixie spokesman Michael Freitag said.

The company, which sought Chapter 11 bankruptcy protection in February 2005, has been trying to iron out negotiations with creditors and has asked for several deadline extensions in hopes the parties could reach an agreement.

Winn-Dixie has not issued a formal announcement on the scheduled end date because pending approvals and legal proceedings are still fluid, Freitag said. But if proceedings move smoothly in the coming months, "Winn-Dixie will have the disruptions of Chapter 11 behind them before the holiday season," he said.

There are roughly 109 Winn-Dixie stores in Broward, Miami-Dade and Palm Beach counties.

When Winn-Dixie emerges from bankruptcy, it will face stiff competition with other top grocery operators in South Florida.

Last month, the company sold 10 shuttered area stores during a public auction in Jacksonville. Competitors Wal-Mart and Foodtown, an East Coast grocery store chain that plans to expand into South Florida, purchased some of those properties.

Those supermarkets were among 35 that Winn-Dixie closed in April. Last June, the company slashed 326 locations -- nine stores in South Florida and 44 statewide -- and pulled out of some areas altogether.

Jaclyn Giovis can be reached at jmgiovis@sun-sentinel.com or 954-356-4668.